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Section2 Initiatives to Capture Markets（PDF：1009KB） Section 2 Initiatives to capture markets 1．The emerging countries strategy With the relative size of Japan’s market shrinking compared to the global market, the importance of expanding into emerging economies is growing. Capturing demand in emerging economies is necessary in order to both enable Japanese companies to tap into growing worldwide demand and channel that wealth back into Japan and promote exports of goods and procurement of components and materials from Japan. Nevertheless, while there is a tendency to use the generic term “emerging economies”, the fact is that the situations differ from one region to another in terms of such matters as their degree of economic development, the extent of expansion into those regions by Japanese companies, and the competitive environment with companies from other countries. To tap into the growth of emerging economies to the greatest possible extent, it is necessary to promote strategic initiatives based on an understanding of the situation in each emerging economy. (1) Policies and progress in each region Until now, market analysis has been conducted according to the classification of markets into the following three groups based on the Japan Revitalization Strategy 2013 (decided by the Cabinet in June 2013). (i) In China and ASEAN, Japanese companies have already established industrial clusters and supply chains on a substantial scale, thus the government has aimed to further tap into demand there through broader industrial expansion (“full expansion”) in consideration of the growth of consumer markets. (ii) In Southwest Asia, the Middle East, Russia/CIS, and Latin America, Japanese companies have lagged behind their U.S. and European counterparts in business expansion, thus the government has been strategically focusing intensive efforts on “achieving critical mass” in a select few promising sectors. (iii) Regarding Africa, the number of business bases established by Japanese companies that have expanded into the region: 657 (around 1% of business bases established by Japanese companies around the world), has been very limited, thus the government has been cultivating an environment that allows Africa to be positioned as a field for Japanese companies’ business expansion by creating as many examples of success as possible. Below, an overview of future policies and the current progress status by region will be provided. (A) China <Future policy> China is the second largest economy in the world and is maintaining relatively high economic growth. Given that China is the largest trading partner for Japan and that many Japanese companies have already expanded into the country, it is important to further deepen the trade and investment relationship between the two countries and improve the business environment for Japanese companies. It is also important to support efforts to capture new markets by taking advantage of Japan’s strengths. 707 Specifically, the government will improve the environment for mutually beneficial business cooperation at the private-sector level by promoting various consultations and exchanges at the government level, including the Japan-China-Republic of Korea (ROK) Trilateral Economic & Trade Ministers' Meeting and the Japan-China Energy Conservation and Environment Forum. <Progress status> In April 2015, Prime Minister Shinzo Abe and Chinese President Xi Jinping held the Japan-China Summit in Jakarta. In November of the same year, Prime Minister Abe and Chinese Premier Li Keqiang held the Japan-China Summit in Seoul, the ROK, and they affirmed that the two countries would further strengthen exchanges and cooperation in such areas as the economy. At the end of October, just before the summit, the Japan-China-Republic ROK Trilateral Economic & Trade Ministers' Meeting was held in Seoul for the first time in about three and a half years with the participation of Minister of Economy, Trade and Industry Motoo Hayashi, and an agreement was reached on further promoting initiatives to strengthen multifaceted cooperation, including the improvement of supply chain connectivity through facilitation of distribution and customs procedures. In addition, the Ninth Japan-China Energy Conservation and Environment Forum was held in Tokyo in November with the participation of Minister of Economy, Trade and Industry Hayashi and State Minister of Economy, Trade and Industry Yosuke Takagi in order to promote Japan-China cooperation in the fields of energy conservation and the environment. At this forum, 26 new cases of Japan-China cooperation were agreed upon, bringing the cumulative number of cases of such cooperation to 285. (B) ASEAN <Future policy> In the ASEAN region, there are a variety of countries, ranging from those which face a lack of basic infrastructure and human resources for industry to those which have made significant progress in establishing industrial clusters but which are losing their cost advantage. In this region as a consumer market, the middle and wealthy classes are expected to grow further in the future, so the attractiveness of ASEAN as a whole is increasing. The government aims to strengthen the production network and capture the ASEAN market by supporting the improvement of the business environment, infrastructure development and economic integration, among other activities. For example, the efforts include support for country-by-country initiatives, such as infrastructure development and enhancement of transparency intended to improve the business and investment environments in Indonesia, a study on the infrastructure, energy mix and the development of the Dawei Special Economic Zone, which is necessary for achieving balanced development through a virtuous circle of activities in urban and rural areas and promoting industry in Myanmar, and Vietnam’s industrialization strategy which seeks to foster six strategic industries. The efforts also include the dissemination of the concept of the quality of infrastructure throughout the whole of ASEAN through ERIA. Efforts to capture markets in a wide range of industries are also needed. Such efforts include the improvement of the competitive environment through institutional development in the field of energy conservation in ASEAN. In addition, the government aims to capture markets by promoting the 708 industrial advancement of ASEAN and the improvement of the business environment in services industries through the use of the framework of the ASEAN Economic Ministers and Minister of Economy, Trade and Industry of Japan Consultations - Economic and Industrial Cooperation Committee (AMEICC). <Progress status> In Myanmar, a joint Japan-Myanmar consortium was established in October 2013 to develop the Thilawa Special Economic Zone, with the groundbreaking ceremony taking place the following month and the opening ceremony held in September 2015. The public and private sectors are working together to develop infrastructure in the surrounding area and establish a one-stop service to provide support. In Indonesia, members of the public and private sectors in both countries have been moving forward with the Jakarta MPA (Metropolitan Priority Area), an initiative that seeks to improve the investment environment through measures including infrastructure development. At the Summit held in March 2015, after the inauguration of a new government in October 2014, an agreement was reached that the two countries will work together to improve the business and investment environments, develop infrastructure and implement economic and industrial cooperation under a new framework of cabinet-level dialogue involving both the public and private sectors. At the Japan- Indonesia Summit in November 2015, the leaders of the two countries announced cooperation concerning the development of quality infrastructure. In addition, to capture markets in a wide range of sectors, activities under the Cool Japan initiative in the ASEAN region have been strengthened. (C) Southwest Asia <Future policy> Countries in Southwest Asia, including India, Bangladesh, Pakistan and Sri Lanka, are part of a region with one of the greatest potentials in the world because of such factors as their population size (the total population of these four countries is currently approximately 1.6 billion people and will expand to around 2 billion people by 2030 according to a certain estimate), GDP growth rate, and growing middle class, so it is very important for Japanese companies to capture markets there, including infrastructure projects. It is also important to strengthen economic relationships and industrial networks between Southwest Asian countries and the Asia-Pacific region. The government aims to strengthen the connectivity within the region by enhancing cooperation with Southwest Asia and the surrounding region through collaboration between the Regional Comprehensive Economic Partnership (RCEP), the Delhi - Mumbai Industrial Corridor and the Chennai-Bangalore Industrial Corridor. <Progress status> In India, the government of Prime Minister Narendra Modi, which was inaugurated in May 2014, has shown an active stance on inviting foreign capital, including inviting manufacturing industries under the “Make in India” initiative. At the Japan-India Summit that was held in September of the same year, when Prime Minister Modi visited Japan, an agreement was reached on matters that will contribute to further enhancement of the Japan-India economic relationship, including doubling of the amount of 709 Japan’s foreign direct investments in India and the number
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